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The United States has announced a sweeping 50% tariff on Canadian goods, citing discriminatory treatment of American alcohol, automobiles and dairy products. The duties are expected to take effect Aug. 19 and, unusually, will reach some products that would ordinarily receive preferential treatment under the Canada-U.S.-Mexico Agreement. Energy, potash, fish and critical minerals are among the reported exemptions.

CHARLEBOIS: Donald Trump’s new tariffs put Canada’s food economy on menu Back to video

For Canada’s food and beverage economy, the stakes are significant. Canada exports about $1.4 billion in alcoholic beverages to the U.S. annually, representing roughly 90% of our alcohol exports. Spirits are particularly exposed. Canadian dairy exports to the U.S., while much smaller, are worth about $360 million annually.

But the immediate trade flows are only part of the story. The larger issue is how badly Canada has misread Washington — and how little influence Ottawa now appears to have over events.

The tariffs rely on Section 338 of the U.S. Tariff Act of 1930, a rarely used presidential authority allowing Washington to retaliate when another country is deemed to discriminate against American commerce. It is an obscure and potentially contestable instrument, but the warning signs were visible. Canada’s removal of American alcohol from provincial shelves and its administration of dairy........

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